Tuesday, April 23, 2019

Galaxy Digital Preparing $250 Million Crypto-Collateralized Loans for Crypto Firms

Galaxy Digital is on the verge of raising $250 million to fund loans to blockchain and cryptocurrency companies.

Expanding Horizons

The increasingly expanding firm which was founded by a former partner at popular Goldman Sachs, Micheal Novogratz, has now outlined new plans to cope with the increasing demands of the company.

Galaxy Digital describes itself as a “diversified merchant bank dedicated to the digital assets and blockchain technology industry . . . [which] has extensive experience spanning investing, portfolio management, capital markets, operations, and blockchain technology.”

The firm is well known for its crypto-lending platform and has reportedly lent millions of dollars to dozens of cryptocurrency companies, startups, and even lending firms such as itself. According to a recent post by Business Insider, the company is now making plans to raise a credit fund of no less than $250 million, which would allow it to approve loans to crypto firms, with crypto assets, buildings and even mining hardware standing as collaterals. Galaxy Digital already issues loans through its balance sheet, but the investment firm, which notably helped companies such as BlockFi raise more than $52 million last year, is now looking to have its own fund.

mike novogratz

Galaxy Digital continues to expand, and Novogratz has explained that the recent development is a response to the increasing demand of borrowers in the crypto space, owing especially to the bear market. His firm’s share trades which got off to a rocky start last year, received a positive boost towards the end when its founder bought more shares, owning almost 80 per cent of the company’s ordinary shares. This year has seen the positivity continue to increase.

Bear Market Not Slowing Things Down

Like many other firms, Galaxy Digital had a trying year in 2018 as the bear market threatened many companies. However, while the company initially had to struggle, the bear did later come with its own exciting perks, and the winter period is becoming increasingly better for lending firms. Because of the devastating decline of the crypto market which saw some cryptocurrencies lose more than 80 per cent of their previous peak values, a lot of crypto companies are now seeking loans to balance things out. The mining sector has been the most hit, as mining profits took a massive plunge.

The bad news has seemingly chased more clients into the waiting hands of companies like Global Digital and BlockFi, with the latter firm recording 1000% increase in revenue since June after it launched its services.

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